In 1167, under the pressure from the ongoing wars between the Almoravid Dynasty and the new invasions of the Almohad Caliphate, the Moorish King Muhammad ibn Mardanis (nicknamed the Wolf King), ceded the Taifa of Albarracín to a vassal of Sancho VI of Navarre, a noble from Estella-Lizarra named Pedro Ruiz de Azagra.

[citation needed] In 1172, Pero Ruíz d'Azagra managed to consolidate his power over the Señorío making that territory independent of the other Christian Kingdoms in the region.

James I of Aragón decided to besiege the city that same year but lifted the siege after he failed to gain significant support from his nobility.

One of the major battles the Señorío contributed its forces to was the Siege of Burriana which resulted in a victory for Aragon over the Zayyan ibn Mardanish and the Taifa of Valencia.

Attempts to recover the lands by the contemporary lord, Juan Núñez I de Lara, who decided to pursue an alliance with the Kingdom of France, were defeated.